It's all very good-cop bad-cop... or maybe just bad-cop proxy bad-cop.

Haha perhaps.

Regarding the ban...

I mean they could go as far as making it illegal to posses, trade, transact, own, mine etc etc etc...

Will that be hard to enforce?

Yep, absolutely, but it doesn't mean they wouldn't/couldn't try it and it likely would have devastating consequences to the price, at least in the short term.

Eventually they may realize it is very difficult to police and give up, or they may be so successful at it, they basically kill it.

We shall see I guess, though hopefully they don't even attempt to go this route.

I feel like if the US were to have another major terrorist attack and it came out that it was financed by bitcoin, the knee jerk reaction by our commander and chief would be to ban it...

Here's to hoping we don't ever have to ever worry about this as bitcoin establishes itself and is used by people so much to the point it's virtually impossible to ban!

The more it is used and established, the harder it would be to kill!